constitution which was the main claim of the 26 states that sued but turned around and found it constitutional under the taxing power even though the plain language of the law it wasn't a tax. justice roberts was clearly looking for any rationale to uphold the law. >> i think because he was looking not to get criticized, have the court criticized for being too political. he probably believes he was protecting the reputation of court but he made the court look more political and hurt his reputation and ultimately the court, too. if you have your own hit or miss please send it to us and sure to follow us on twitter. thanks to my panel and to all of you watching. i'm paul gigot. happy new year and hope to see you right here next week. >> gregg: a fox news alert.

we are getting word from the nation's capital that harry reid will soon be coming out and address the fiscal cliff at the microphones any moment now. congressional leaders are holding marathon negotiations behind closed doors. we're only getting drips of what is going on racing against the clock as the final countdown to the fiscal cliff deadline begins. unless a deal is reached by january 1st, more than $500 billion in tax increases and spending cuts are set to kick in affecting nearly every american. hello, i'm gregg jarrett. >> arthel: i'm arthel nevil. welcome to a brand-new hour. as gregg just said the ball is in the senate's court. the republicans submitted a proposal to the senate democrats last night and are still waiting for a response.

who is up at the podium right now. >> gregg: let's take a look at the shot. >> they are continuing to discuss this. we think there could be a path forward. one thing there is democrats have come out and made a change on cpi and republicans are concerned if that is not used as an offset to replace some of the spending cuts that would occur under sequester that democrats put forward and alternative. this is a process, there is a lot of things going on right now but republicans don't want to see new revenues, democratic tax increases to be used for new spending. that is where many of our members have drawn the line right now.

and democrats want to use.... [ inaudible ] >> there are other issues involved but that is one example. frankly i mean it's not just about replacing question se questions terror putting a place a policy that will protect social security in the long term. that being said. if democrats don't accept that as an offset, then come up with something else. because raising taxes to pay for new spending is not something that republicans believe it should be about. it ought to be reducing the deficit and debt. >> senator mcconnell has spoken a couple times with the president and two of them have

come up bipartisan deals to get through congress. >> those conversations and discussions continue. we remain hopeful that that will have a breakthrough. obviously what happened between the two leaders in the senate have broken down because the senate democrats fail to come forward with a counteroffer to the proposal that republicans made last night. hopefully the discussions between senators and mcconnell will be something we can vote on today or tomorrow that would add veteran what we believe would be an economic disaster. >> will you take a scaled down version, raising taxes on

everybody, do you think your republican colleagues that enough republicans will opt over on the democratic side if needed? >> it's hard to say until we know exactly what might be in it. this is what i would say about it. if that is where we ends up. if we decides to move a bill on the floor and extension and put it on vehicle for that, he ought to address this. give us an opportunity to debate in some of these things we think ought to be a part of it. if history is any guide in this is take a bill and prevent republicans from having an opportunity for amendments. i think we would welcome an opportunity to have a debate and american people can be part of it. >> gregg: we have fox team coverage now the fluid situation in washington today, ed henry at

1600 pennsylvania avenue. keeping an eye on the president and our chief congressional correspondent is live in washington at the bureau. let's begin with you, this is obviously the final push in congress to try to avert the fiscal cliff. >> it's interesting. harry reid told us they are making progress in the talks. at this stage they don't have a deal. what you heard senator thune, republicans are saying if we give you more revenue what will you going to do with it? are you going to pay down the deficit? if you are going to use it for more government spending we don't want a part of it. senator mcconnell on the republican side seemed to get frustrated because he felt like the democrats were slow walking the th, 18 hours without a response. mcconnell made a call to a well known senator, joe biden to see if he could help. >> we're willing to work with

whoever can help. no single issue remains an impossible sticking point. a sticking point appears to be a willingness and interest or frankly the courage to close the deal. >> reporter: as senate aide says it was designed to try to jumpstart the talks and consequences of getting a tax increase is a huge concern. >> gregg: what went awry in these talks? >> you heard senator thune. a fiscal cliff deal is a new way calculating inflation that would lower social security payments. democrats say they would do it as part of much bigger deal but it was off the table for the smaller deal they are working on. so democrats called it a poison pill. >> at some point, negotiating process, it appears there are things that stopped us from

moving forward. i hope we're not there, but we're getting real close. that is why i still hold out hope we can get something done, but i'm not overly optimistic but i'm cautiously optimistic. >> chuck schumer from new york continues to say the things, meaning a deal, always happens at the end. >> gregg: we'll probably hear about the change of cpi which is basically a new way of calculating an index the cost of living and slowing down the growth of sbph like social security. we'll probably hear about. mike, thanks very much. >> arthel: we're going to the white house where president obama is holding firm to his demand and blaming republicans for the failure to reach a deal. the president also appearing on a political talk show this morning to make his case to the american people. chief white house correspondent

ed henry is live at the white house. >> reporter: good to see you. first time the president did a sunday talk show since 2009 since he was pushing healthcare reform trying to sell a fiscal cliff deal. he is was on meet the press. republicans weren't happy with that appearance because he they felt he was blaming them. new development in the last hour or two, vice president biden has come back from delaware. he is now here at the white house. he has had two phone calls with mitch mcconnell. in previous budget battles, joe biden has been the closer on these deals. his coming back from delaware might be a sign they are moving a little closer. that will be something to watch. the whole thing about changing cpi and reining in cost of entitlements, republicans are judging in on that. take a listen.

>> one of proposals we made was something called change cpi but basically makes an adjustment in terms of how inflation is calculated on social security. highly unpopular among democrats not something supported but to strengthen social security in the long time i'm willing to make those decisions. >> reporter: in the morning, the president seemed to be opening the door to rein in those entitlements and then you heard harry reid shut the door on it. the president was talking in the context of reining in entitlements in a four trillion dollar debt deal not in the last minute deal, he would be willing to do that in much broader debt deal. but when you talk to republicans ron johnson from wisconsin, the real problem the president is not willing to rein in spending. >> senator harry reid should

have passed a budget in the last three years and you would have a framework and budget resolution. the fact we're down to the 59th minute of the 11th hour and you have a couple officials behind closed doors trying to do a back room deal is an outrage. >> reporter: we're waiting for senator reid to come to the microphones and what is significant about that he has is supposed to give a status update on the talks, not just about cpi and reining in entitlements whether that is going to be part of a final deal but what is the threshold on tax cuts and increases. on the meeting with friday says he wants to go back to the threshold of $250,000 or less. that is tax cut over 250, it's a tax increase. senator mcconnell may be trying to move that to $400,000. >> arthel: and then the notion of lowering social security

payments is definitely off the table in terms of democrats' side? >> it's clear from senator reid said, they are not going to touch social security. but the president has made clear in discussions with speaker boehner, these entitlement programs will be on the table but only if it's a broader debt deal. republicans have different ideas. they want to see more cuts in spending right now. >> arthel: thank you very much. >> gregg: congress is not only facing a fiscal cliff, it's up a dairy clarify, if you will. the current farm bill is set to expire on new year's day. if an extension of that is not passed, the farm policies would revert to laws back to 1949 and cost of milk, that could skyrocket. back then the government used a formula to calculate dairy prices that is much more expensive than it is today. one option said to be on the

table is short term extension that would prevent milk prices from rising. >> arthel: to other stories. a judge ordering a psychiatric evaluation for a woman suspected of shoving a man off a new york public is way platform. he was arraigned last night on murder and hate crime. she confessed to pushing a man in front of a moving train telling them, i hindus and muslims. co-worker was was behind due. >> gregg: two missing boys from georgia have been found in texas an amber alert was issued, ages nine and seven when they didn't come back from a visit from their dad on wednesday. somebody recognized the trio and caught up with them in austin.

now their father is facing extradition. police say the boys are okay. >> arthel: when we come back, unbelievable video of a plane crash. a dash cam catches the moment a plane slams into a highway. now investigators are trying to determine what went wrong there. >> gregg: and states are raking billions of dollars from lottery, but there are deep concerns that this is not the best way to spend money in tough times. we'll explore it. >> arthel: also a new york newspaper gets ready to release the addresses of more gun owners. >> to take the names have people that are doing the right thing and obeying the law and treat them like this is assinine. can. but phillips' caplets don't.

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. >> arthel: quick check of the headlines, president obama announcing he intends to press the issue of gun control after the shooting massacre in newtown connecticut. tom coburn says he did not vote to confirm chuck hagel if president obama nominated him. hagel a former republican senator he says lacks the experience to manage an organization like the pentagon. margaret thatcher leaving the hospital. she was admitted last week for an operation to remove a bladder growth. >> gregg: senate majority leader harry reid saying he is not overly optimistic that a deal will be reached to avoid the so-called fiscal cliff. even if they get something passed here there are other

challenges that our economy will face. global powers like china and europe and japan are having major problems of their own. that could affect the way they do business with us. joining us is to talk about, ed, good to see you. biggest problem some of these governments to stimulate their economies, die let's just print a bunch of money. that has catastrophic events with them and even with the united states that may tried traded with them. >> that seems to be just to print money. that is not how it works. when somebody prints money, it's devalues their currency which makes anything they want to export or anything that they are importing more expensive. that is why your food is more

expensive because we imported a lot of that. that is why energy is more expensive because we import a lot of that. if every country is doing that, its race to the bottom how quickly they can devalue their currency. >> we trade with so many different nations. we trade with europe and certainly with china. look at our trade imbalance and you can figure that out. europe has only a handful of countries that are doing decently? >> there is about six. they are in the northern part of european. what europe wants is these countries, mainly germany to bail the rest of europe out. germany has balked at that quite a bit. merkel has an election coming up soon. i don't think you'll see germany doing a lot of bailing out the rest of europe. and europe is the number one global concern to this day. if europe doesn't do well, the rest of the world economy is

going to suffer. >> gregg: what about japan? is it insolvent already? >> yeah. a lot of people believe so. that will be a big story in 2014. just recently japan announced that they are going to start printed ago lot of money and last week, you saw the yen drop in value 15% which means that, if what we are company exporting to japan that just hurts our sales quite a bit because the value of their yen is less. so not able to buy as many products which is then, gregg, to hurt our stock market because a lot of our growth comes outside our borders of the united states. this is is a problem that goes directly to nks 401-k plan. >> then there is china which is the growth juggernaut but it accelerated? >> in fact the beginning of the year they are looking at double-digit growth. we're going to see 6-7% growth.

china is going to be okay. they are not suffering stagflation like the rest of the world is, which means runaway prices and slow growth. they will see the ripple effect from all these other countries. >> gregg: as keynesian theory ever worked ever in the long run? >> what printing money does it tries to squeeze up credit but you rarely see growth of it. so the printing of money, constant print can of money around the world we haven't seen it work. i don't think it's going to work. it will do one thing, raise the prices everything we spend money on today. >> gregg: good to is a you. >> arthel: and if all that doesn't work, you play the lottery.

california alone raking $4.8 billion in 2012. what are the odds of that in such a fragile economy. bringing in claudia kalan with the story. >> you are right. it's not just california. in states across the country, lottery sales were thriving in 2012. according to the experts it has a lot to do with the state of the economy. >> are you going to walk away with it? >> even times are tough, lotteries rake in the dough. >> they want to have hope and dreams. >> fiscal year 2012 saw lottery sales nationwide jump 9% over 2011 which was up 7% from 2010. >> they respond a fun recreational activity to give flight to our imagination if we won a million dollars. >> reporter: states see it to supplement lost tax revenue.

in california which has the nation's third highest unemployment rate, lottery sales are up 20%. rhode island gamblers dumped 7% more in the low tickets even as the state's jobless rate climbed to number two. why the trend? >> hundred times more likely to die from a flesh eating virus. >> but it's the hope of instant wealth that keeps people coming back for more. some experts caution against it. >> the best thing is hang on to your dollar. >> reporter: most financial advisors, they don't have anything against the lottery per se, but they look at a recreational invest and not as an investment strategy. >> arthel: you know a little bit about that too. >> gregg: i never play, i know

the odds but now and again it's kind of fun. all right. caught on videotape, moment of what police think caused this deadly scene. >> arthel: and lawmakers are trying to hash out a deal to avoid major tax increases and spending cuts on january 1st at americans try to grasp how much this is going to cost them. >> it's going to go up. >> january 1st. >> wow! wow is not wow. wow is wow! this is america. we don't let frequent heartburn

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>>. >> gregg: it is bottom of the hour, time for the top of the news, a short time ago, senate majority leader harry reid says congress is making progress to avoid the fiscal cliff, but no deal as yet. unbelievable dashcam video of a plane slamming into a russian highway flying debris on the cars driving by. investigators say may to be blame. >> a bomber packed explosives

rammed it into passenger bus full of religious pilgrims. >> the u.s. senate has approved a $60.4 billion recovery package for areas devastated by super storm sandy, but the relief is hardly a done deal because the bill faces an uncertain future in the house. molly henneberg is live in washington to ex it. >> there are a couple of reasons why the sandy aid legislation may along wish in the house. price of the bill and number two the calendar. let's go to number one. some conservative lawmakers are uncomfortable with the $60.4 billion aid package passed by the senate. a congressman says congress needs to figure out where to get that money. >> i'm saying this is somebody who knows it may be me next. it may be my district. somebody has to pay for it. it's right thing to do.

we can't continue to borrow this money to pay for things we wanted. we have to find that savings someplace else. >> reporter: the possible holdup in the house prompted the governors of new jersey and connecticut to send a letter to lawmakers leaning to them to approve the money. senate has passed this aid package in a bipartisan manner and there is no reason the house should not do the same. with the house reconvening to avoid the fiscal cliff, remember that disasters affect every part of this makes and we stand together in times of crisis. second difficulty for the house is calendar. house g.o.p. speaker john boehner who has signaled he does support some kind of sandy aid has not decided to bring it up for vote in this session of congress. this session ends on thursday. if it is not brought up by then the bill will expire and the next congress will have to started on it all over again. >> gregg: molly henneberg, molly thanks.

>> arthel: mixed messages on fiscal cliff, next today. republican senator lindsay graham expressing optimism on deal and president obama is calling out lawmakers for rejecting offers for last month. >> what do you think the chances of a small deal in the less 48 hours to avoid the cliff? >> exceedingly good. i think what have we accomplished, a political vick for the president. the president has stood his ground. he is going to get tax rate increases but upper income americans and sad news for the country we have accomplished very little of not becoming greece. this won't affect the debt situation. it will be a political victory for the president and i hope we'll have the courage of our convictions when it comes time to raise the debt ceiling to fight for what we believe in. but hats off to the president.

>> we have been talking to the republicans since the election has been over. they have had trouble to say yes to a number of repeated offers. >> so what kind of deal if any can we expect before the clock runs out? joining us for a fair balanced debate, tony is here, national political correspondent for talk radio news service and fox news contributor, jehmu greene former president of the women's media center. i wanted to start with senator graham's soundbite. if taxes are increased to top earners, i'll start with you. does it highlight the crux of the matter the fighting is about party politics and not the people? how do you see it? >> certainly the president is not walking around in a flight suited saying mission accomplished. this is not about a political victory for president obama but

it's about reality check for republicans. they have been walking around for the past seven weeks like alice and wonderland. they are finally starting to stick their head out of rack it hole and saying we're going to be responsible and we're going to do their job. >> arthel: how is that? >> they have not been able to deal realistically and honestly with the 98% of americans whose taxes are going to go up. the president said right after the election, senate has passed this bill. house should pass this bill. make sure that there is certainty for businesses and middle-class, especially going into the holiday season but they didn't do that. whatever zeal going to come out of this last minute shenanigans is not going to be the balance that the president was willing to go forward and upset a lot of democrats. >> arthel: let me jump in. the issues that the president went against his party. you can't say the president came

out with this entire package that was completely please go to everybody across the board. let me see how tony feels about that. jump in there because she is do you see it that way? >> the president's proposal was frankly unserious. it was the same budget he proposed two years ago. >> but he did make changes? >> but the changes he made, let's rehash all the politics -- let's not do that. the issue was rate hikes. republicans very early on should have proposed as plan "b" as plan "a" is to set a higher threshold rate increases on a million dollars.

>> this was pelosi-schumer proposal, an argument that went nowhere should we have or should not have rate increases. that should be on the agenda. >> arthel: but the president won the election again. he said we wanted higher earners to pay more taxes. >> we let the whole conversation to be about tax revenue which even the commission says is only one-tenth of the problem. nine tenths revolve around meaningful spending cuts and entitlement reform a which we're not going to get in a stopgap measure that looks to be a the conclusion of the fiscal cliff negotiations. >> arthel: which is kind of pa they had i can. honestly, they know all these talks have been on the table for a long time. if economists are suggests that go a combination of fax increases along with $56 billion in spending cuts could knock the economy back into a recession what is the argument? >> i agree.

it is pathetic but there isn't an argument for why, especially the tea party members. i think boehner has been more flexible. he just doesn't have control over his party. he has members in the congress who are willing to hold our economy hostage. they know that if we go over this cliff, we're going to go back into a recession. that last thing that our economy needs. so if they had taken the balanced field the president put on the talk where he would have been the first president to cut social security. it would have shored up confidence with businesses with the middle-class. it would have allowed us to start down doing meaning deficit reduction and it would have made sure the middle-class would not have a tax hike. >> the president has indicated a willingness to have that

conversation but they said that was off the table. which is why it's not going to be final negotiation. the other point is, even with the new revenue the republicans have agreed to, this is how assinine this idea is, the president is not willing to commit the revenue to pin down the deficit. isn't the whole negotiation is by-product the debt talks from a year ago? isn't it supposed to be paying down our debt and getting back on the track? so if we can't agree that new revenue goes to paying down our debt, what is it for? new spending? >> arthel: i got to go. i to give tony the last word. thank you very much. thanks for the discussion. >> gregg: a woman accused of shoving a man right in front of an oncoming new york subway train is said to be bipolar, how that may play into murder case against her. our legal case is here to look

at the facts, that is next. let's give thanks -

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>>. >> gregg: a judge is now ordering a psychiatric evaluation for a woman accused of pushing a man in front of a subway train. police charging 31 erica menendez after she told them,

quote, i pushed a muslim off the train tracks because i hate behind dues and muslims. ever since 2001 when they put the twin towers i have been beating them up. the man she is accused of killing is 46-year-old senodo sen who is believed to be behind due. a cousin says she is bipolar here. if it does turn out she has a psychiatric deficiency, what is the appropriate punishment? here is our legal panel. all right. so clearly the first thing the judge has to do is order a psychiatric evaluation, even put her on trial, right? >> that is right. before we get to what is appropriate punishment. court or the jurors will have to decide whether she knew what she was doing. whether she could be held responsible for her actions.

>> gregg: competency is the first hurdle. does she understand the charges against her? >> i think she does. the attorney is probably going to argue otherwise. >> a mental disease so severe you don't know right from wrong. isn't that the test for insanity? >> it's interesting, new york followed what we remember the mcnorton rule and until 1965 and then they went with a slightly different iteration. one can you appreciate the facts of what you are doing. you are squeezing someone's neck and you think are squeezing lemons and number two, you know what you are doing is wrong. there is a couple interesting points. number one she ran away from the scene. show theoretically. >> gregg: consciousness of guilt? >> conscious necessary you know what you did is wrong. two, her specific language about

because he is muslim is same argument. >> she admitted in doing it. it's not all the aliens were following me, she pushed him. i targeted this person. >> gregg: in the case of andrea yates, she drowned her children in the bathtub. she called police which prosecutors used against her and said, hey, she understood what she had done and knew that it was wrong. she was eventually on a second trial found to be insane. >> that is the flip side of what you just said. you have to be crazy to call the police, right? that is interesting, if you remember there was something to do with a tv show and it was very controversial. how she had seen somebody drown, a child on law and order and then it turned out there was no such episode. >> with menendez, she ran from the scene.

she didn't call police, but when they apprehended her, i have been upset with muslims and behind dues ever since the towers. >> gregg: so the prosecution gets their expert appointed by courts who evaluate her and probably say, she may have a mental disease but she knew from right and wrong and so she is, thus, sane but the defense is going to get their own. >> of course. i have three levels have cynicism. worst is you can pay an expert to say anything, i don't go quite that far. >> gregg: i do. [ laughter ] >> but a bit like naive, it's evaluation. my opinion is that it's somewhere down the middle on that one. >> thing we have to remember the jury is going to listen to these experts and ultimately decide whether this woman should be acquitted by the defense on insanity.

>> gregg: i'm sure bipolar is in book, the book of mental disease in dsm, but you can't point to the book and say, she is bipolar she has a mental disease. you have to go further than that. >> you have to go way further. many people function fine, not only under that diagnosis but many others. it's case specific to the incident itself. >> and one thing we need to find out was she is medication. maybe she is bipolar she clearly knew what she was doing. >> gregg: it's a huge uphill battle. it's succeeds in less than 1 percent. all right. kesha and doug, thanks for being here. >> arthel: a newspaper under fire for releasing the names and addresses of gun permit holders ready to release more names. now, one lawmaker wants to stop that from happening but it could

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. >> arthel: a new york newspaper that stirred up controversy by printing the names and addresses of gun permit owners now adding more names to the list. gun owners outraged saying they are being singling out. now one state senator wants to prevent anyone other than law enforcement to having access to this information. >> to take the names of thousands of people who are obeying the law, doing the right thing, problemly registered and treat them like level three predators is assinine. >> arthel: they are saying the

massacre in newtown is top of line for most of our readers. we obtained the names of residents lilly. joining us is mary walter and garland nixon. so is this crossing the line, going too far? >> initially i didn't think it was a big deal. it's no big deal because criminals know who to rob, they are going to guy who is not armed. then i thought about it. they are treating these people the same way you make the names and addresses of sexual predators known under megyn's law. nobody expected this information to be used in the way in which it is being used. the irony of the whole thing, the editors that work at the newspaper they are not afraid of doing this legal gun owners.

i am waiting for the lawsuit when one of the gun owners gets robbed and i'm waiting for the lawsuit. >> arthel: these guys are going to be targeted by criminals who might want to steal guns? >> i really don't think that is going to come into play we're looking that crime is going to be the issue. i think it's ridiculous and i see no practical value regarding the gun debate and putting these people's information out there. that being said, i certainly don't agree with introducing legislation that is of dubious validity. i don't think we should throw the first amendment out to protect the second one. i don't think it's a good idea to publish the names of individuals that own guns. >> arthel: and paper is saying, this is public information. we went and grabbed it and put it out there. most residents and neighbors are not going to look for that

information. what if the publication narrowed it down to the type of guns they have, those that have possession of assault rifles? >> the thing about it, as i understand it, what publishing is the information of people who actually have gun permits who may be retired law enforcement officers or private detectives. it doesn't serve any great purpose. what has happened since then they their adversaries have published the information of the editor. so we have a feud going on here. it serves no purpose. it actually plays into the fear factor that people are looking at thinking maybe the government is going to take my guns. i think it's bad for all sides. >> arthel: does it play into the fear factor? >> we agree on that. i don't like the idea of saying we're not going to make this public information. i don't like that idea. but no one expected that information to be used in the way it is being used.

i think garland is right. it does play into the fear factor. what the left is forgetting, the nra has a higher approval rating than both president and congress. i think this is going to be backfire them. i think a lot of people are very upset and people think it's really wrong, but if we have to make a law to prevent people from doing things like this and using public information of people that are not done anything wrong and exercising their rights and use that information trying to harm them, maybe we do have to do that. >> arthel: they are saying that the damage has been done, it's too late you can't take it back there. the information is out there. what do you think the neighbors will respond? if there is a possibility of is on tra sizing those people that are legally holding guns? >> i don't think it's going to be make a difference. i don't think people are going

to search through 10,000 names. apparently they have 20,000 or 30,000 names. i don't think people are going to take the time to look. it's an exercise in futility. we've got our feud going on. what next? do we have a conservative newspaper publish the names and addresses of abortion doctors. and we open the newspaper the only things we can't find is news. >> actually i agree with him. let's face it. how many people read this new. this is a plan to make a name for themselves and to try to i guess people to subscribe or read their newspaper. it's not news. it doesn't serve a purpose. i totally agree this is taking the focus off of what we really need to look at. this is an exercise in futility and i think it's dumb. >> arthel: i got the point there >> what they did is dumb. >> arthel: i got it.

good to see you and happy year to both of you. >> gregg: we are monitoring every move on capitol hill concerning talks around the fiscal cliff. it may not do anything about the real problem of the deficit. >> well, it's going to be somewhere between 8,000 to $12,000 that you don't have. so i'm not looking forward to that. >> is that more than you expected? >> even a dollar is more than i can afford right now, not good news. this family used capital one venture miles to come home for the holidays. that's double miles you can actually use... sadly, their brother's white christmas just got "blacked out." y pa :::: ::::

you can actually use! how illuminating. what's in your wallet? let me guess, am on the naughty list again? ho ho ho!

a fox news alert. late breaking developments from capitol hill on the state of a possible fiscal cliff deal as lawmakers scramble behind closed door to come up with a compromise on preventing a series of impending tax hikes and across the board spending cuts from taking effect just over 24 hours from right now. hello, everyone. >> welcome to a brand-new hour inside america's news headquarters. the ball is in the u.s. senate's court. republicans committed a patrolman to the senate democrats and they're still waiting for a response. >> i'm concerned about the lack of urgency here. i think we all know we're running out of time. this is far too much at stake

for political gamesmanship. we need to protect the american families and businesses from this looming tax hike. everyone geese agrees that action is necessary. >> this morning we've been trying to come up with some counter offer to my friend's proposal. we've been unable. i had a conversation with the president and at this stage we're not able to make a counter offer. i will say this, i think that the republican leader is showing absolutely good faith. it's just we're apart on big issues. >> we have fox team coverage of the rapidly changing situation. our chief white house are correspondent ed henry a live at the house and mike, republicans are worried about what the house would do with new tex revenue.

>> they would like to see the revenue use today pay down deficits. arizona senator jon kyl says the democrats want to spend in the fiscal cliff deal and believes the tax revenue will be the same and that's not solving anything. raising taxes to pay for new spending is not something that republicans believe this debate ought to be about. it ought to be reducing the deficit and debt and what they're suggesting is we want new taxes, higher taxes, from people in this country. >> we learned a few moments ago harry reid made a counter offer but he didn't say what it was. we're working it. >> we're waiting. when he comes to the podium we'll go live. >> the democrat side, the change in entitlement irritated them. >> the republican's request

included a way of calculating inflation that loser recipients of social security. democrats were willing to do that as part of a $4 trillion massive deal but democratic aides said as part of this deal, the change would be a poison pill. >> 36 hours left until the country goes over the cliff. i remain hopeful but relatistic about the prospects. at some point the negotiating process, it becomes obvious when the other side demands concessions the other side is not willing to make. >> reid and mcconnell continue talking. a big discussion is the threshold for extending bush tax cuts. senator tom harken says republicans offered lower rates for individuals you have to $360,000 and $450,000 for couples. >> i noticed that.

apparently senator reid has not made anything official at the moment in terms of a counter-offer. we'll monitor that as i know you are as well. >> thank you. he has an offer, he's just not saying what it is. now to the white house where president obama is stepping up pressure on lawmakers to come up with a deal and placing became for file you're to do so squarely on republicans. ed henry is live in the white house. >> good to see you, if you think it's frustrating straight for you and i, think about the president. he's watching and waiting like the rest of us, getting updates from his staff but the ball's in the senate's court so there's not too much the president can do. he's been through hours of negotiations with speaker boehner and it's largely up to senator reid and mcconnell to go back and for the with the offers and counter-offers. the president's view is if that

bipartisan effort fails he wants an up and down vote in the house in the senate late today, early tomorrow on his plan a fallback, extend unemployment benefits for 2 million people and set the threshold for tax cuts at $250,000 a year or less. president on "meet the press" today suggests if the republicans don't acts, it's their fall. >> over the next 48 hours my hope is people recognize regardless of partisan differences, our top priority has to be to make sure that taxes on mid class famous do not go up. that would hurt our economy badly. >> republicans were not happy that the president was laying the blame, setting the idea that the blame game would go to republicans if we go off the cliff. interesting that vice president joe biden today has come back from delaware and has here at

the white house. he's had at least two phone conversations with senator mcconnell. the last time they had a budget fray cuss, it joe biden worked t the deals. some call the vice president the mcconnell when i whisperer becae has a way with working with him when others are not. his involvement might be a sign of progress. >> the president only spent two years in the u.s. senate and joe biden spent much of his lifetime there. and mcdonnell as well. so they have a working relationship. that makes sense. ed henry, live at the white house. >> the fiscal cliff is not the only one in town, congress facing a milk cliff. the farm bill is set to expire

new year's day. if an extension is not passed farm policies are reverting to laws from 1949 and dairy costs would skyrocket. one option, a s extension that would at least prevent milk prices from rising. >> the looming fiscal crisis is leaving small business owners on the edge, creating uncertainty. anna spoke with business observers about their fear and joins us live in new york. >> hey there, uncertainty of the looming fiscal cliff is causing small business owners for defensive and unable to plan for the future. economists say businesses are postponing purchases like equipment or merchandise until decisions are made. >> the fact is businesses are holding back on their investments. we see this in official government numbers in terms of

private sector spending. we also see it in hiring. >> i spoke to arthur cooper, owner of a internet marketing company, who is concerned the change in tax rates will hurt his ability to hire and reward his employees. >> when you don't know what the rules are, all right? that's a -- it's hard to be aggressive and it's hard to be really resolute and -- in your business planning. >> this is echoed by many. barbara and her husband are concerned if congress fails to act their company would suffer as they make up the difference in salary increases. >> i don't want to lay anyone off. it's become like a family here. there are 12 people that work here and we have -- they all have children and you feel a little bit responsible for them. i know i'm not supposed to do that but i can't separate myself from the rest of them. >> economists say the wallets of

consumers will weaken and for a slowly strengthening economy, the shock of less spending could be all it takes to push the country back into a recession. >> indeed. that's what many economists are saying. anna, thank you. we have a fox news alert, a deadly tour bus crash in oregon. blamed on icy road conditions. five people were killed and about 20 injured. it happened on interstate 84 outside la grand. the bus went out of control, crashed through a guardrail and went down an embankment. about 40 people were onboard. 3,000 miles away from oregon, fox extreme weather. the big digout under way in the northeast. the latest winter storm dumped over a foot of snow. behind this snow, bone-chilling temps. some residents forced to endure

the cold with no heat because the snow brought down power lines, knocking out electricity. new calls for secretary of state hillary clinton to testify as soon as possible on the deadly attacks in benghazi that killed four americans. senator lindsey graham demanding had he appear before congress ahead of john kerry confirmation. take a listen to the interviews on fox "fox news sunday." >> senator graham, how important is it for secretary of state hillary clinton to testify under oath before she leaves office about the benghazi terror attack? and what do you think we still need to know? >> absolutely essential that she testify. i want to know from the secretary of state's point of view, were you informed of the security situation, were all these cables coming out of benghazi, ever get to your level. if they didn't, that's a problem. if they did, why didn't you act

differently. >> some republican colleagues are prepared to hold off confirm nation of john kerry as secretary of state until secretary of state clinton testifies as secretary. >> that's going to happen i've been told by senator kerry, he wants that approach. he needs to hear what she says so we can comment. it makes sense to have her go first. >> senator feinstein, do we hear she needs to testify first and have you heard -- it's been 3.5 months since benghazi and she's never answered questions about benghazi, her role before, during, after the attack. do you have reason to believe she'll testify as secretary of state? >> she said she will and i believe she will. she's had a very real accident and is recovering and she will be back, i gather, her first day bay be next week. that's good news.

>> the attacks raised questions and concerns about security, intelligence and the obama administration's response. from wild police chases to run away escalators, we've got a complete rundown of the year's most compelling caught on camera moments. >> plus, crunch time on capitol hill. now even the senate chaplain is weighing in on the ongoing budget crisis. >> despine interinvention aside. why some republicans say president obama's recent criticism of republicans is more destructive than constructive. greenbrier. >> the sticking point appears to be a willingness or interest or courage to close the deal. i'm willing to get this done but i need a dance partner. greenbrier thanks to our explorer card. then, the united club. my motr was so wrong about you.

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time for a check of the million dollars, the international envoy speak seeking to end civil war says the solution would collapse syria and threaten security. police in southern california searching for a suspect who stabbed two teenagers at a mall. a boy and girl are recovering after surgery. nwpd assigning thousands of patrols for times square on new year's eve, wearing radiation devices to detect dirty bombs. >> new conversation has congressional leaders working on the fiscal cliff. mitch mcconnell is pushing back against remarks made by president obama during a televised interview in which the president blamed the entire crisis squarely on congress and

the g.o.p. mcconnell's office responded with while the president was taping those discordant remarks senator mcconnell was in the office work to go bring republicans and democrats to get on the solution. discussions continue today. joining me, doug shawn, former pollster for president bill clinton. nancy, media speaks strategy and national spokesperson to senator john mccain. the president goes on "meet the press" and claims it's the fault of the awful republicans and that angers mcconnell, who lashes back out. so that was clearly a calculated risk by the president, angrying your opponent versus pressuring him publicly to cave. which way does it go? >> we don't know. we're all pretty pessimistic given the breakdown the talks

today but i think the president's strategy is to keep constant pressure on the republicans, recognizing this battle is not going to be over whether or not there's a deal. it's going to go on dealing with the debt sciele and the budget and the president is not letting up. he said he won the election and that's how econducting himself. the polls are pretty clear that he's got the upper hand. >> nancy, i read your column. you thing the president doesn't really negotiate, he demands and threatens and lectures and what was that on "meet the press," posturing? >> this is a president who hasn't learned how to actually be present. he would rather lecture than lead. i can't believe we're letting him get away with that. senator mcconnell had to call joe biden and same come on, doesn't anybody in the building understand we're trying to

legislate? you have to participate. it's disappointing. we would have been better off if he stayed in hawaii golfing. >> "new york times" writer david brooks said president obama governs like a visiter visiter a morally superior civilization. successful presidents use force of their personality to persuade. clinton was like that. ronald reagan did that too. is that what this president is missing? >> it is, his strategy has been to stay out of the fray this weekend because he wants the blame to be on congress, which has about a 10% approval, versus his 55% approval. the president a not good and arm

twisting. he knows he won the election and has public opinion on his side. he believes sooner or later the republicans will cave. >> here's the beef. republicans say you want $600 billion in new spending, which would absolutely negate the 600 billion-dollar in new tax revenue, so this doesn't -- this is a deal that's got no beef. where's the peeve? it doesn't attack -- beef? it doesn't attack debt and deficit. >> they're raising taxes and increasing spending. this is how we get into this mess. i can't believe this is the proposal to start fixing the problem. it's irrational. i think what the democrats are doing is they're trying to balance this on the back of small business owners, which is a stupid thing to do when the economy is in a downturn and holding out at the same time to protect corporate welfare. look at the win production tax

credit billion dollars price tag for big companies. >> doug, maybe you can explain this. why not let the u.s. senate vote on what the house passedpassed? if the senate doesn't want that, they can amend that. but the duty of voting on ideas and proposals seems alien to these lawmakers. why is that? >> well, because the -- i think you heard it in nancy's voice, there's no desire to compromise what the other side says is wrong, evil, stupid. bottom line, the culture in washington doesn't allow common sense solutions to be considered, much less voted on. it's a sorry state of affairs, i think we had in bowls simpson is

plan we would have have unity around and it was rejected. >> what disappoints americans is the president and congress and all of us have known for a year and a half that these massive tax increases and spending cuts known as see quest transportation were going to happen in a day and they haven't done anything about it. it probably is no wonder or surprise that the public's perception of politicians is abysmal. they deserve that negative rating they get. >> well, i have to agree. from the standpoint of we've known this problem is coming. they even set up a self enforcing mechanism and they can't work within their own deadlines. i don't want to push the blame on one body of congress, if you will, the house versus the sent but we're relying on the senate to act when the senate hasn't

passed a budget in three years. they've been out of the who is the office, if you will. and i have to raise serious questions about whether we have the leadership we need engaged at this time. your point about the difference between other presidents who picked up the phone, worked the phone, rolled up their sleeves and got into the details and helped come up with a solution was spot on. >> doug, i just remember the famous picture of linden johnson in his opponent's face in the white house. he picked up the phone and got him to get over there. i think it was over the civil rights legislation. this guy was back like this and in the end, he followed lbj and it was passed. >> you know, we had a culture then, after a tragic assassination, that we were going to do the people's business. we weren't going to blame the other side in harsh tones and that's missing. nancy may passionately feel the

democrats and obama are to blame. i have a different perspective but we're all americans, we're all going to be hurt by the cuts that are coming next week if we don't pass something. we'll be hurt by defense cuts, by tax increases. we're going to be hurt. we have to put the country first, put partisanship aside and neither side are doing this. >> even if they pass, they don't deal with the amt or payroll tax which means everybody who has a job is going to pay more in taxes. payroll alone. >> that's absolutely right. that's very sad that we can't work together to just do a minimal fix to get at the amt. >> the only people safe are the 20 million plus who are unemployed and underemployed and they're just trying to put food on the table. >> their benefits will get cut too. everybody's at risk.

>> doug, nancy, we're out of time. thank you so much. >> thank you. maybe prayers might help. concerns over the fiscal cliff on the mind of the chaplain praying for divine intervention. >> mighty god, have mercy upon of your greatyour unfailing compassion, let us feel your presence today on capitol hill. as we gather with so much work left undone, guide our lawmakers with your wisdom. lord, show them the right thing to do and give them the courage to do it. be their shelter in the midst of the storm regardless of how high

the waters rise. when they feel exhausted, remind them of the great sufficiency of your grace. look with favor on our nation and save us from self-inflicted wounds. >> moments after the prayer, senate majority leader harry reid appeared on the senate floor but no updates on the nexts. the near misses, close calls and the most amazing videotape of the year. we have the must-see moments of 2012 caught on tape next. >> plus, need a drink? cocktails to cheer in the new year. we're going to show you what you can drink tomorrow night without packing on the pounds. [ mother ] you can't leave the table

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bottom of the hour, time for top of the hour news. mitch mcconnell is asking vice president joe biden to get involved fiscal cliff talks. taxes on every american worker will go up if a deal is not reached. >> a judge ordered a psychiatric

evaluation on a woman suspected of shoving a man to his death off a subway platform. a fifth victim dies following a plane crash in moscow. investigators are trying to determine what caused it. the senate has approved a $60.4 billion recovery package for areas hit by superstorm sandy. the bill heads to the house where the prospect for passing are no sure thing. moll y what's the holdup? the price tag. some house republicans say it's too steep and not offset by spending cuts. one south carolina republican congressman says he and others want to help the people hurt by sandy but lawmakers need to figure out where the money's going to come from. >> it's not paid for. i know that's a difficult conversation to have but it's a necessary conversation.

if we can't come together and figure out a way to stop spending someplace else to pay for this, do we ever hope to balance or budget? >> the governors of new york, new jersey and connecticut are pressing for their states to get the money question. writing the question to every member of the house is if this storm devastated your incidentcy, would you say the house has done enough? we urge your support for this aid. the house is not schedule today vote on this legislation. >> the people are suffering, so what's likely to happen now, molly? >> it's always possible the sandy bill could be attached to a fiscal cliff legislation or other legislation before the he had end of the year but john boehner signaled he supports sandy aide and has not decided whether or not to bring it up for a vote in this session. this session ends thursday and

that's key. if they don't vote before then, the senate bill will expire and the next congress will have to start on it all over again. >> in the meantime, the people are still hurting, without their homes. molly, thank you very much. these days video cameras are about everywhere. whether they're security or cell phone cameras, they have caught some of the most compelling moments of 2012. johnathan hunt breaks down the more memorable moments. >> surveillance cameras are worldwide recording an estimated 4 billion hours of footage week and with americans armed with smartphones, we're seeing caught on camera moments like never before. 30 million cameras in the united states catching your every month move. >> that was one of the funniest things i've ever seen. >> one wild police chase.

florida cops try to collar a suspect riding a horse down a busy road. officers say he was riding under the influence. no shirt, no shoes, and for this guy, definitely no service. one wal-mart shopper letting it all hang out. a toddler put through the spin cycle in the washer. a laundromat employee flips a circuit breaker. >> i scared the kid died. >> dramatic video as firefighters and police investigating an electrical volunteer knocked off their feet in a series of explosions, two men suffering first-degree burns but have recovered. dashcam in police cruisers catching two amazing crashes. this kentucky trooper swerves to avoid a truck and loses control slamming into a home, sending bricks flying. and a heroic moment in texas as

a police officer investigating a fender bender pushes a woman out of the way of a speeding car. his cruiser making a 360-degree spin. some video released for safety sake, boston showing a woman in a mobility scooter trying to use the up escalator, tumbling, nearly crushed but okay. she was able to walk away. dash cameras in portland showing terrifying close calls. people running across the tracks, some mere seconds from contact. and a delaware woman in a close shave. >> she stepped one foot out. by the time the second foot was out the train wiped her car out. >> amateur video catching our eye. >> put your damn seat belt on. pull it over. >> this detroit man trying to make a citizen's arrest on a cop. in the end, it was the man

behind the contemporarily in trouble cited for reckless driving. the happiest day of their lives, turning into a hotel lobby brawl between two wedding parties in philadelphia. shouting, heckling, fights and arrests, captured on a man's cell phone, cops called after bargain shoppers got into fisticuffs the day after giving thanks. now some of our favorite caught on camera moments. while hurricane sandy raged an explosion seen from street level in brooklyn, this is the moment power was knocked out, affecting millions in new york city. a heart stopping scene for any parent, a mother loses track of her baby stroller, her child nearly struck by traffic, luckily a garbage truck driver able to alert others and stop the carriage. this thief didn't have ants in

his pants, he had a puppy. the man stuffing a pricey pom rainion down his shirt. a middle schooler in washington jumps and takes the wheel as his bus careens off the road, his driver having a heart attack. >> i run out, grab the wheel, steer to the right side of the road, take the keys out of the ignition. >> cell phone video of a brooklyn girl falling three stories, caught by a city bus driver haled a hero. >> a hero is nothing but a sandwich. that's all i can say. i'm not a hero. >> let's pray for more heroes caught on camera in 2013. jonathan hunt, fox news. >> i like it. thanks, jonathan. it's down to the wire on capitol hill. house speaker boehner expected to call members of congress back to washington tonight. we'll talk to one of those

congressmen and get his take on what he thinks will happen and measure his level of optimism. >> living paycheck by paycheck. i have five kids and that's going to put us way down in the hole. >> we have to do more than raising taxes. we have to make serious cuts and people have to contribute to our country. not just one bracket of people that have to do everything. anyone have occasional constipation, diarrhea, gas, bloating? yeah. one phillips' colon health probiotic cap each day helps defend against these digestive issues with three strains of good bacteria. approved! [ female announcer ] live the regular life. phillips'.

so in less than an hour, house speaker john boehner is expected to call congress members back to washington for a vote on a fiscal cliff deal. assuming one can be hammered out. joining me, one of those members james langford at the rotunda. give us the inside school in what do you make of the current impasse? >> 80s frustrating impasse. the house passed our see questation document in in may. we're still waiting for harry reid to move something through the senate to respond what we passed in may in the house of representative. we're all watching as well. >> what do you make of the compromises on the table and

sticking points. >> there's no compromise out of the senate at this point. what we put out in the house, we pass something, the senate passes and we do a compromise from that. we did our part in the house seven months ago and we're waiting on the senate. we're at the final hour. this was no surprise. year and ayear and a half ago ws deadline. why the senate hasn't respond we have no idea. >> haven't there concessions bandied about? >> yes but at the end of the day it's talk. you have to have a piece of legislation to negotiate and we're waiting on that piece of legs. while -- legislation. we're waiting for harry reid to pass something in the senate so we can amend it and get it done. we're here, we're waiting, the

house is in place. we're voting on simple votes tonight in anticipation of senate sending something over. they're working hard, we're waiting for that and ready to go. >> is it about the spending cuts and reducing the deficit that is your sticking point? >> yeah, the biggest issue we're dealing with is spending. if you look at 2007 versus 2012, the federal government spends a trillion dollars more a year now than what we did five years ago. the dirty secret everyone those around about tax revenues is not true. this past year, 2012, the federal government received the third highest amount of revenue in the history of the united states under this tax code. if we had this particular taxes for the spending of 2007, we would have had a balanced budget. ate spending driven issue that we've got to take seriously. we cannot continue to raise

taxes to the level to accomplish the spending. >> the president has offered compromises and i think everybody agrees and i believe that you guys agree even if you cut -- discontinue bush tax cuts for the wealthy americans, it won't fill in the gap or complete -- it won't fill the hole. so what is it? this is what everybody is hearing, the americans are frankly sick of hearing this. it's like you toss the ball on your side, no, it's your fault. is there any way you can come up with some sort of solution by 12:01 tuesday? there. there are options. we're waiting to see what the senate gets done. at the end of the day if you took the tax increases for every bracket, they raise state taxes, all the obamacare taxes. you take those tax increases to a level higher than it was during bill clinton, we'd have

twice as high of a deficit during any year of the bush administration. we say this is not a tax issue, this is clearly a spending issue. >> so congressman. >> until the president comes to that we won't deal with the solution. >> what specifically -- if he came to you and gave you a sheet of paper, what do you want to see on the paper? >> i can show you that piece of paper. we passed it in may. we passed a $200 billion spending cut that identifies fraud and waste in government and went through specific programs saying this is wasteful, duplicative and fraud. we identified those and the senate never acted on that. >> why is that? >> we don't know. that's the frustration. we did things early for once. you can -- people can say what they want, but we did our job and did it early, we did it in may, and we've waited seven

months for a response. people would say it's eliminating fraud and duplication in government and it's not been responded to. there's where we are, saying if you don't like eliminating fraud and duplication, take any part of that and say if we can't do the simplest thing, where can we cut spending? >> is there going to be a deal? we'll wait with you. we'll watch the other side of the hill and see what they pass. >> we're all waiting. we need you guys to get something done. >> we do too. >> thank you very much for taking the time out. get back to work now and figure this out for us. >> we'll do. >> thank you. maybe if we made them wait for their cocktails before they could do a deal. [ laughter ] because, look, the cocktails will be flowing tomorrow on new year's but some have as many as my favorite, a mcdonalds

double cheese. ringing in the new year with cocktails that will not ruin your new year's resolution. sarah is here to explain them all. [ cellphone chirping ] [ buzzing ] bye dad. drive safe. k. love you. [ chirping, buzzing continues ] [ horn honks ] [ buzzing continues ] [ male announcer ] the sprint drive first app. blocks and replies to texts while you drive. we can live without the &. visit sprint.com/drive.

harry reid just spoke on the floor of the senate saying threes a significant distance between us and we're trying to work out an agreement. then he said, we're going to meet tomorrow at 11:00 a.m. we'll try to get further details on what's going on. >> until we meet again. >> yes.

>> well, meantime, the clock keeps ticking and tomorrow is new year's eve, time to let loose and celebrate with cocktails. >> look out. some of these cocktails can be as fattening as fast food. how can you ring in the new year without threatening your waistline? to show us, sarah tollen. >> happy new year. >> happy new year. the first thing you wanted to bring up was how many calories people intake when they drink period. >> in terms of food. >> well, if you have one drink you pretty much commit to eating 33% more calories for the day. it loosens your inhib hib i guesses and you eat 28% more. people don't realize how much calories are in alcoholic beverages. this is -- >> what is this, hot buttered rum? >> sounds like a good idea.

bad. 420 calories, half your daily recommended allowance for saturated fat. >> and whipped cream. >> and butter and brown sugar and rum. if you want a rum drink a mojito. not as festive but it's rum, lime juice and club soda. not to know i can. there's a -- tonic, there's a big difference. >> do i see margaritas? >> you do. this is the fox news version that we can make in the instituted. this is a new year's south of the border. a regular margarita has 400 calories. at a restaurant, up to 900 calories. >> why, because they add syrup? corn syrup, high fructose, the sugary margarita mix at bars is bad news. high in calories. this is my diet version, sprite zero, white tequila, krystal

light and club soda, mix it together and it's girl. it's the skinny girl margarita. if it's too diet soda, make it with high quality tequila, lime and club soda. >> the white russian. >> another bad idea. you're mixing half and half with liquor, this is festive. an old-fashioned hot toddy. >> whiskey, lemon juice and hot water. half the calories and all the bite. >> now, the chocolate martini is always decadent. >> i don't understand that. dessert martins. i have seen rice pudding martins. if you want dessert, eat dessert. if you want a martin, have a martin. this is 500 calories, this is 200. gin, vermouth and wine.

>> i see bubbly champagne. >> 100 calories per flute. the fewest calories on the table. i don't find champagne as killing at wine. >> that's 120. >> yep, for red or white. >> funny you knew that? >> we start with -- >> all the heart healthy benefits too. >> i would go with a glass of wine. >> some are beer drinkers, guinness, 120 calories per bottle. one of the healthiest beers in the world. >> i wouldn't have guess the. it's so thick. >> that's it. >> i read my notes. >> that's how you knew that. she knows her wine. >> drink responsibly. >> of course. happy new year. >> happy new year to you. >> thank you for the advice. that's going to do it for us a

special two-hour fox report is harris faulkner is next. have a great, happy holiday. bye-bye. ♪

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